The latest trading session saw North American Construction (NOA) ending at $22.07, denoting a +1.28% adjustment from its last day's close. The stock exceeded the S&P 500, which registered a gain of 1.02% for the day. Elsewhere, the Dow saw an upswing of 0.4%, while the tech-heavy Nasdaq appreciated by 2.03%.The heavy construction and mining services company's shares have seen a decrease of 2.2% over the last month, surpassing the Construction sector's loss of 6.08% and the S&P 500's loss of 3.15%.The upcomi ...

Financial Performance - Combined revenue for 2023 reached $1,273.6 million, a 20.8% increase from $1,054.3 million in 2022[7] - Adjusted EBITDA for 2023 was $296.9 million, up from $245.3 million in 2022, reflecting a 21.1% growth[7] - Adjusted EPS increased to $2.83 in 2023, compared to $2.41 in 2022, marking a 17.5% rise[7] - Net debt increased to $720.9 million in 2023, up from $355.8 million in 2022[7] Project Revenue and Growth - The Australian business generated approximately $150 million in revenue in 2023, with expectations to increase to ~$575 million in 2024[14] - The Fargo flood diversion project achieved ~$120 million in revenue in 2023, with projections of over $175 million for 2024[12] - The company is currently bidding on projects worth $9 billion, indicating strong demand in the market[17] - The company plans to allocate $55 to $70 million for growth capital in the Australian fleet for 2024[18] Safety and Environmental Goals - The Total Recordable Injury Rate (TRIR) for 2023 was 0.29, significantly below the industry target of 0.50[10] - NACG aims to achieve a 10% reduction in scope 1 emissions intensity by 2025 and a 20% reduction by 2028[36] - The company targets a Total Recordable Injury Rate (TRIR) of 0.5 or less, emphasizing that all workplace incidents are preventable[37] - NACG's commitment to health, safety, and environmental protection aims for zero incidents in its operations[32] Sustainability and Diversity Initiatives - NACG is committed to achieving 30% gender diversity on both the Board of Directors and among senior leadership[35] - The 2023 Sustainability Report has been released, with plans for the 2024 report to be issued in the first half of the year[34] - The company emphasizes a culture of sustainability that balances environmental, social, and economic performance as key to long-term success[33] - NACG is focused on advancing sustainability goals through tangible projects and formal systems that align with its values[33] Operational Strategies - Operational priorities for 2024 include achieving equipment utilization targets and implementing best practices at the MacKellar Group[40] - NACG will leverage telematics to improve operational performance and mechanical availability of ultra-class and 240-tonne haul truck fleets[40] - NACG plans to enhance its reputation for operational excellence by improving site conditions and fleet maintenance strategies[38] Challenges and Responses - The Nuna joint venture faced challenges, resulting in an EBITDA shortfall of approximately $7.5 million, prompting a turnaround plan[15]

[Letter to Shareholders](index=5&type=section&id=Letter%20to%20Shareholders) The CEO's letter reviews mixed Q3 results, highlighting safety, Nuna challenges, and the MacKellar acquisition, forecasting strong 2024 growth - Third quarter results were mixed, with excellent safety performance (**64% reduction in incident rate YoY**) but operational challenges for the Nuna Group of Companies due to project permitting delays and the effects of wildfires in Yellowknife, NWT[7](index=7&type=chunk) - The acquisition of the MacKellar Group in Australia, effective October 1, is a major milestone, with strong performance leading to increased expectations for 2024 due to high demand for heavy equipment[9](index=9&type=chunk) - The company is targeting a full-year earnings potential of **$4.50 per share** and a 2024 free cash flow range of **$160 to $185 million**, representing a potential over **50% increase** from the record-setting 2023[9](index=9&type=chunk) [Management's Discussion and Analysis](index=6&type=section&id=Management%27s%20Discussion%20and%20Analysis) This section analyzes the company's Q3 and YTD 2023 financial condition, operations, MacKellar acquisition, financial highlights, liquidity, accounting, and outlook [Overall Performance](index=7&type=section&id=OVERALL%20PERFORMANCE) Q3 2023 performance showed modest revenue growth and stable Adjusted EBITDA, but net income and adjusted EPS declined due to project delays Q3 2023 Financial Highlights vs. Q3 2022 | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue | $194.7M | $191.4M | +$3.4M | | Total combined revenue | $272.6M | $269.6M | +$3.0M | | Gross profit | $26.3M | $24.6M | +$1.7M | | Adjusted EBITDA | $59.4M | $60.1M | -$0.7M | | Adjusted EBITDA margin | 21.8% | 22.3% | -0.5% | | Net income | $11.4M | $20.2M | -$8.8M | | Adjusted net earnings | $14.3M | $17.6M | -$3.3M | | Adjusted EPS | $0.54 | $0.65 | -$0.11 | | Free cash flow | $10.0M | $3.4M | +$6.6M | - Equipment utilization was **56%**, negatively impacted by the relocation of heavy equipment to the Fort Hills mine and wet weather, partially offset by contributions from the ML Northern fuel and lube fleet acquisition[15](index=15&type=chunk) - Combined revenue was affected by project permitting delays and wildfire-related disruptions impacting the Nuna Group of Companies, offset by the Fargo-Moorhead flood diversion project's largest operational quarter to date[16](index=16&type=chunk) [Significant Business Events](index=8&type=section&id=SIGNIFICANT%20BUSINESS%20EVENTS) The company completed the MacKellar Group acquisition for $395 million, expanding its credit facility to $470 million lending capacity and $820 million total borrowing limit - Closed the acquisition of MacKellar Group in Australia, effective October 1, 2023, for a total expected consideration of **$395 million**[24](index=24&type=chunk) - Entered into an amended and restated senior revolving credit facility, increasing total lending capacity to **$470 million** (comprising a **$280M CAD tranche** and a **$220M AUD tranche**)[26](index=26&type=chunk) - The new Credit Facility permits an additional **$350 million** in secured equipment financing, bringing the total borrowing limit to **$820 million**[26](index=26&type=chunk) [Financial Highlights](index=9&type=section&id=FINANCIAL%20HIGHLIGHTS) This section details Q3 and YTD 2023 financial performance, including GAAP to non-GAAP reconciliations, revenue, gross profit, operating income, and decreased equity earnings from joint ventures [Liquidity and Capital Resources](index=15&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of September 30, 2023, the company maintained **$108.4 million** in liquidity, with net debt increasing to **$395.3 million**, detailing capital additions, cash flow, and credit facility amendments [Accounting Estimates, Pronouncements, and Measures](index=21&type=section&id=ACCOUNTING%20ESTIMATES%2C%20PRONOUNCEMENTS%20AND%20MEASURES) This section details the accounting framework, recent presentation changes like combining project costs into 'cost of sales', and defines non-GAAP financial measures - The company updated its presentation to combine project and equipment costs into 'cost of sales' in the income statement and to include finance lease obligations within 'long-term debt' on the balance sheet, with comparative periods restated[96](index=96&type=chunk)[97](index=97&type=chunk) - A new accounting standard update (ASU 2023-05) regarding joint venture formations will be effective January 1, 2025, and the company is currently assessing its impact[98](index=98&type=chunk) - The report defines numerous non-GAAP financial measures used for performance analysis, including Adjusted EBIT, Adjusted EBITDA, Adjusted EPS, Free Cash Flow, Combined Revenue, and Net Debt[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[112](index=112&type=chunk)[117](index=117&type=chunk)[114](index=114&type=chunk) [Outlook](index=25&type=section&id=OUTLOOK) The company provides a robust 2023 and 2024 financial outlook, projecting significant growth in combined revenue, Adjusted EBITDA, and free cash flow, with deleveraging targets 2023 & 2024 Financial Outlook | Key measures | 2023 | 2024 | | :--- | :--- | :--- | | Combined revenue | $1.2 - $1.3B | $1.5 - $1.7B | | Adjusted EBITDA | $295 - $310M | $430 - $470M | | Adjusted EPS | $2.80 - $3.00 | $4.25 - $4.75 | | Free cash flow | $90 - $110M | $160 - $185M | | Net debt leverage | Less than 1.8x | Less than 1.4x | - The 2023 free cash flow projection was updated to a range of **$90 to $110 million** to reflect the MacKellar acquisition and the timing of cash receipts from joint ventures[129](index=129&type=chunk) [Interim Consolidated Financial Statements](index=28&type=section&id=Interim%20Consolidated%20Financial%20Statements) This section presents the unaudited interim consolidated financial statements for Q3 and YTD 2023, including Balance Sheets, Operations, Equity, and Cash Flows, with accompanying notes [Interim Consolidated Balance Sheets](index=28&type=section&id=Interim%20Consolidated%20Balance%20Sheets) As of September 30, 2023, total assets increased to **$1.009 billion**, driven by PPE, with stable liabilities and shareholders' equity growing to **$339.6 million** Consolidated Balance Sheet Summary (in thousands) | Account | Sept 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | **$197,662** | **$230,359** | | Property, plant and equipment, net | $695,176 | $645,810 | | **Total Assets** | **$1,009,065** | **$979,513** | | **Total Current Liabilities** | **$158,383** | **$192,303** | | Long-term debt | $392,648 | $378,452 | | **Total Liabilities** | **$669,429** | **$673,594** | | **Total Shareholders' Equity** | **$339,636** | **$305,919** | | **Total Liabilities & Equity** | **$1,009,065** | **$979,513** | [Interim Consolidated Statements of Operations and Comprehensive Income](index=29&type=section&id=Interim%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Q3 2023 revenue was **$194.7 million** with net income of **$11.4 million** (**$0.43 basic EPS**), a decrease from Q3 2022, while YTD net income increased to **$45.5 million** Statement of Operations Summary (in thousands, except per share) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $194,744 | $191,383 | $630,922 | $536,122 | | Gross Profit | $26,312 | $24,567 | $88,762 | $58,958 | | Operating Income | $14,138 | $17,649 | $49,935 | $39,592 | | Net Income | $11,387 | $20,220 | $45,495 | $41,291 | | Basic EPS | $0.43 | $0.75 | $1.72 | $1.49 | | Diluted EPS | $0.39 | $0.65 | $1.51 | $1.33 | [Interim Consolidated Statements of Cash Flows](index=31&type=section&id=Interim%20Consolidated%20Statements%20of%20Cash%20Flows) In Q3 2023, operating activities generated **$37.5 million** cash, investing used **$27.0 million**, and financing generated **$9.3 million**, resulting in a **$19.8 million** net cash increase, while YTD cash decreased by **$27.2 million** Cash Flow Summary (in thousands) | Activity | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Cash from Operating | $37,512 | $31,432 | $109,521 | $91,102 | | Net Cash used in Investing | ($26,970) | ($28,042) | ($107,123) | ($79,945) | | Net Cash from (used in) Financing | $9,250 | $7,698 | ($29,639) | ($4,969) | | **Increase (Decrease) in Cash** | **$19,792** | **$11,088** | **($27,241)** | **$6,188** | [Notes to Interim Consolidated Financial Statements](index=32&type=section&id=Notes%20to%20Interim%20Consolidated%20Financial%20Statements) The notes provide essential context to the financial statements, detailing accounting policies, revenue, joint ventures, debt, share capital, and subsequent events, including the MacKellar acquisition

Revenue Performance - Revenue for Q2 2023 was CAD 193.6 million, a CAD 25.5 million (or 15%) increase from Q2 2022[12] - Total combined revenue reached CAD 277.0 million, representing a CAD 49.0 million (or 21%) increase from Q2 2022[13] - For the three months ended June 30, 2023, revenue was $193.6 million, an increase of 15.3% from $168.0 million in the same period last year[29] - For the six months ended June 30, 2023, revenue was $436.2 million, up 27% from $344.7 million in the same period last year[30] - The company reported a combined revenue of $276.9 million for the three months ended June 30, 2023, up from $228.0 million in the same period last year[23] - Revenue generated from backlog for the six months ended June 30, 2023, was $364.8 million, with an estimated $222.2 million expected to be performed over the remainder of 2023[88] - The Company reported revenues of $158,485 million and $347,970 million for the three and six months ended June 30, 2023, respectively, compared to $125,774 million and $251,204 million for the same periods in 2022, reflecting a year-over-year increase of 26% and 38%[192] Profitability Metrics - Adjusted EBITDA for Q2 2023 was CAD 51.8 million, an increase of CAD 10.2 million (or 24%) from Q2 2022[14] - Adjusted EPS was CAD 0.47, up 176% from the prior year figure of CAD 0.17[18] - Gross profit margin for Q2 2023 was 11.1%, an increase of 3.8% from Q2 2022[12] - Gross profit for the three months ended June 30, 2023, was $21.5 million, with a gross profit margin of 11.1%, compared to $12.4 million and 7.4% in the same period last year[31] - Adjusted EBITDA for the three months ended June 30, 2023, was $51.8 million, representing an adjusted EBITDA margin of 18.7%[25] - Operating income for the three months ended June 30, 2023, was $10.3 million, an increase of $4.0 million from $6.3 million in the same period last year[36] - Net income for the three months ended June 30, 2023, was $12.3 million, compared to $7.5 million in the same period last year[25] - Net income for the six months ended June 30, 2023, was CAD 34,108 thousand, compared to CAD 21,071 thousand for the same period in 2022, representing a 62% increase[140] Cash Flow and Capital Expenditures - Free cash flow was a use of cash of CAD 4.3 million, impacted by sustaining capital additions of CAD 38.3 million[19] - Cash provided by operating activities was CAD 40.2 million, up CAD 4.7 million from CAD 35.5 million in Q2 2022[12] - Cash provided by operating activities for Q2 2023 was $40.2 million, an increase of 13.5% compared to $35.5 million in Q2 2022[58] - Cash used in investing activities for Q2 2023 was $39.2 million, compared to $25.1 million in Q2 2022, primarily for the purchase of property, plant, and equipment[61] - Capital expenditures for Q2 2023 were $41.1 million, significantly higher than $22.3 million in Q2 2022[53] - Cash used in investing activities for the six months ended June 30, 2023, was $80.2 million, an increase from $51.9 million in the same period of 2022[62] Debt and Financial Obligations - Total debt as of June 30, 2023, was $416.0 million, down from $424.9 million at the end of 2022, a decrease of 2.1%[50] - The company has $98.7 million in unused borrowing availability under its Credit Facility as of June 30, 2023, compared to $88.0 million at the end of 2022[165] - The company has entered into a commitment letter to amend its Credit Facility to a maximum amount of $450.0 million[76] - Total contractual obligations as of June 30, 2023, were $514.1 million, down from $537.5 million as of December 31, 2022[70] - Long-term debt decreased to $369.74 million as of June 30, 2023, from $378.45 million at the end of 2022[163] Market and Operational Insights - The company signed a definitive share purchase agreement to acquire MacKellar Group for an estimated consideration of CAD 395 million, expected to close in Q4 2023[20] - The company maintained a strong backlog, with expectations that demand for heavy construction services will exceed contractually committed demand[127] - The company anticipates stable commodity prices for the remainder of 2023, which is crucial for its operational performance[127] - The company has experienced no material change in market risk as of the quarter ended June 30, 2023[130] - The company is exposed to concentration risk, with Customer A accounting for 31% of revenue for the three months ended June 30, 2023[193] Employee and Workforce Metrics - The company had 208 salaried employees and 1,617 hourly employees as of June 30, 2023, compared to 195 salaried and 1,576 hourly employees a year earlier, reflecting growth in workforce[120] - Approximately 83% of the hourly employees are union members, maintaining the same percentage as in June 2022[120] Stock and Shareholder Information - The TSX closing price of the shares as of June 30, 2023, was $25.35, up from $18.08 at the end of 2022, indicating a positive market trend[85] - The company declared dividends of $0.10 per share for Q1 and Q2 2023, totaling $2.64 million paid or payable to shareholders[183]

And what would the return profile look like for that type of investment? It passes our normal hurdle rates, Tim. 20% IRR, three to four-year payback sort of timeframe with -- these are longer life assets, but yes, very strong economics. Great. So like the $5 million to $10 million of investment, is that basically to build the fleet so that you have enough equipment to service the contract? Is that with an existing client? Okay, very interesting. All right. I appreciate all the details, guys. Nice quarter. I ...

Forward-looking statements & non-GAAP financial measures This presentation contains forward-looking information which reflects the current plans and expectations of North American Construction Group Ltd. (the "Company") with respect to future events and financial performance. Examples of such forward-looking information in this document include, but are not limited to, statements with respect to the Company's targets for percentage of Adjusted EBIT to be generated outside Canadian oil sands; the Company's 2 ...

Financial Performance - Revenue for Q1 2023 was CAD 242.6 million, a CAD 65.9 million (or 37%) increase from Q1 2022, driven by equipment utilization of 79% compared to 65% in Q1 2022 [19]. - Total combined revenue reached CAD 320.6 million, representing a CAD 84.0 million (or 36%) increase from Q1 2022, with joint ventures contributing CAD 78.0 million, up 30% year-over-year [20]. - Adjusted EBITDA for Q1 2023 was CAD 84.6 million, a significant increase from CAD 57.7 million in Q1 2022, with an adjusted EBITDA margin of 26.4% [22]. - Gross profit for the quarter was CAD 40.9 million, with a gross profit margin of 16.9%, up from 12.4% in Q1 2022 [19]. - Net income for Q1 2023 was CAD 21.8 million, compared to CAD 13.6 million in Q1 2022, reflecting an increase of CAD 8.3 million [19]. - Adjusted EPS of $0.96 on adjusted net earnings of $25.3 million, up 88.2% from the prior year figure of $0.51 [26]. - Operating income increased to $25.5 million, up from $15.6 million in the same period last year [38]. - For the three months ended March 31, 2023, net income and comprehensive income was $21.9 million, an increase from $13.5 million in the same period last year, representing a 62.2% growth [44]. Cash Flow and Liquidity - Cash provided by operating activities was CAD 31.8 million, an increase of CAD 7.6 million from CAD 24.2 million in Q1 2022 [19]. - Free cash flow was a use of cash of $26.1 million, resulting from adjusted EBITDA of $84.6 million offset by sustaining capital additions of $47.2 million [27]. - Cash position decreased to $15.7 million as of March 31, 2023, down from $69.1 million at the end of 2022, a decline of 77.3% [48]. - Total capital liquidity as of March 31, 2023, was $172.2 million, down from $212.4 million at the end of 2022, a decrease of 18.9% [50]. - Cash used in investing activities rose to $40.9 million in Q1 2023, compared to $26.8 million in Q1 2022, primarily due to $36.5 million spent on property, plant, and equipment [59]. - Cash used in financing activities was $44.4 million in Q1 2023, including $42.2 million for long-term debt repayments [61]. Debt and Financing - Total debt as of March 31, 2023, was $129,750,000, which includes 5.50% and 5.00% convertible debentures [74]. - The average cost of debt increased to 6.7% in Q1 2023 from 4.5% in Q1 2022, reflecting higher interest rates on the Credit Facility [39]. - Total interest expense for the three months ended March 31, 2023, was $7.3 million, up from $4.7 million in Q1 2022, marking a 55.9% increase [39]. - The company’s credit facility had borrowings of $150.0 million as of March 31, 2023, down from $180.0 million at the end of 2022 [67]. - The company maintained compliance with its financial covenants as of March 31, 2023, and expects to continue compliance in the next twelve months [69]. Operational Efficiency - The company is focused on achieving or exceeding utilization targets and improving operational efficiency in the upcoming quarters [13]. - The company achieved a significant milestone by completing the construction of its remanufacturing facility and expanding its main maintenance shop [14]. - The company has integrated DGI Trading Pty Ltd and ML Northern Services Ltd., enhancing its in-house maintenance capabilities [14]. - The equipment fleet is currently composed of 65% owned, 31% finance leased, and 4% rented equipment [52]. Employee and Workforce - The company had 206 salaried employees and 1,719 hourly employees as of March 31, 2023, compared to 196 salaried and 1,657 hourly employees a year earlier [114]. - The company has maintained a stable hourly workforce ranging from approximately 700 to 1,800 employees depending on seasonal demands [114]. Backlog and Future Projections - The company's backlog as of March 31, 2023, was $1,129,786,000, a decrease of $123.6 million from the previous quarter [82]. - Revenue generated from backlog during the three months ended March 31, 2023, was $215.1 million, with an estimated $378.1 million expected to be performed over the remainder of 2023 [82]. - Adjusted EBITDA is projected to be between $255 million and $275 million for 2023 [117]. - Adjusted EPS is expected to be in the range of $2.40 to $2.60 for 2023 [117]. - Projected free cash flows for the full year 2023 are expected to be in the range of $100 to $115 million, an increase from previous reporting, improving liquidity position [116]. Internal Controls and Governance - The CEO confirmed that the interim financial report fairly presents the financial condition and performance of the company as of March 31, 2023 [194]. - The company has established disclosure controls and procedures to ensure the reliability of financial reporting [197]. - No material weaknesses in internal control over financial reporting were reported for the period ending March 31, 2023 [200]. - The control framework used for internal control design is based on the COSO framework, ensuring robust financial governance [199].

Financial Performance & Outlook - The company's Adjusted EBITDA (TTM) is $245 million[13] - The company's Adjusted EPS (TTM) is $2.41[13] - The company aims to improve equipment utilization and project wins to achieve projected revenue growth[4] - The company's bid pipeline is approximately $4.5 billion[97] - The company targets a backlog exceeding $2 billion for 2023[104] Operational Highlights - The company's combined revenue was $1.1 billion[13] - The company operates in 3 countries and across 30 operational sites[38] - The company has a diversified business with 50% of revenue from Canadian Oil Sands customers, 30% from Canadian Mining, 10% from Civil Construction, and 5% each from Mine Management and External Maintenance[39, 40] - The company is focused on increasing maintenance headcount, with a net increase of 50 in 2H 2022[89] Competitive Advantages & Strategies - The company emphasizes its position as the largest heavy construction and mining contractor with a significant equipment fleet in North America[20] - The company focuses on being a low-cost operator through in-house maintenance and global sourcing of components[64, 65] - The company aims to reduce emissions intensity by 10% by 2025, 20% by 2028, and achieve net zero by 2050[78]

Adjusted EBITDA1 ($m) 8 Q4 2 0 2 2E A R NI NGS Utilizing and Investing in Technology | --- | --- | --- | |-------------------------------------------------------------------------------------------------------------------------------|-------|-------| | | | | | Telematics hardware now installed on 375 pieces of heavy equipment | | | | • Specific to Q4, approximately 110,000 machine hours monitored | | | | Acheson control center operational and showing meaningful results | | | | • 395 alerts identified during ...

Financial Data and Key Metrics Changes - Combined revenue reached $320 million, marking the highest quarterly revenue in the company's history, with a trailing 12-month revenue exceeding $1 billion at $1.054 billion, surpassing the previous record of $1.016 billion [24][25] - Adjusted earnings per share (EPS) for the quarter was $1.10, an increase of $0.51 from Q4 2021, driven by $45.7 million of adjusted EBIT [29] - Gross profit margin improved to 17.8% from 14.7% in Q3 2022, reflecting strong operational performance [35] - Adjusted EBITDA reached a record $86 million, exceeding the previous record by over 40% [36] - Net debt levels decreased by $52 million in the quarter, with net debt leverage at 1.5 times [39] Business Line Data and Key Metrics Changes - Revenue from the core heavy equipment fleet increased by 30% quarter-over-quarter, driven by improved equipment utilization and updated unit rates [2] - Equipment operating hours rose over 15% in the quarter, with utilization reaching 75%, significantly higher than the 64% in Q3 2021 [3][16] - Wholly owned business lines, including DGI Trading and external sales of rebuilt haul trucks, posted strong revenue consistent with Q4 of the previous year [4] Market Data and Key Metrics Changes - Revenue generated from joint ventures and affiliates was $87 million in Q4, compared to $54 million in Q4 2021, driven by growth in rebuilt haul trucks and the Fargo-Moorhead flood diversion project [33][34] - The company expects high demand to continue throughout 2023 and into 2024, with a backlog of $1.3 billion, aiming to exceed $2 billion by year-end [46] Company Strategy and Development Direction - The company is focusing on increasing its skilled trades workforce and enhancing internal maintenance capabilities to improve fleet utilization [41][43] - There is an emphasis on leveraging technology, including telematics systems, to improve operational efficiency and safety [19][21] - The company is actively pursuing opportunities in the EV metals market and other commodities, with a focus on M&A for growth [170] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand cycle for commodities, particularly in the context of EV metals, indicating a robust market outlook [101][97] - The company is cautious about projecting trends without sufficient data points, particularly regarding fleet utilization [94] - Management highlighted the importance of maintaining a disciplined approach to capital allocation, balancing deleveraging with growth opportunities [69][70] Other Important Information - The company plans to increase its dividend by 25% and is focused on deleveraging due to rising interest rates [48] - The telematics system has already saved over $2 million in machine components and is expected to double savings in 2023 [21] Q&A Session Summary Question: How should utilization targets be interpreted for the year? - Management indicated that utilization targets of 75% to 85% should be viewed with seasonally weaker quarters at the lower end and stronger quarters like Q4 towards the mid-80s level [53] Question: Is Suncor's contractor headcount reduction an opportunity or threat? - Management believes it is not a threat, as demand for their services remains strong and consolidated [54] Question: How does the backlog and guidance for 2023 look? - Management expects the backlog to exceed $2 billion by year-end, with a cyclical nature affecting quarter-to-quarter comparisons [105][106] Question: What are the impacts of inflation and project margins? - Management stated that inflationary pressures have been modeled into project forecasts, and expected project margins remain intact [166] Question: What is the outlook for the Fargo-Moorhead project? - The project is ramping up well, with expectations for peak production and workforce in the coming year [111][163]